Is UCC E-filing the Right Choice for Your Organization?
These days, nearly every state filing office accepts some form of electronic filing (E-filing) for UCC documents, often either through xml transmission or a fillable web form. Some states are even beginning to mandate E-filing for UCCs. Back in 2012, Colorado became the first state to require that all UCC filings be submitted electronically. New Jersey has now followed suit and will require E-filing for all UCCs beginning July 1, 2015. Click here to read our blog post about this new development.
In recent years, E-filing has been gaining popularity among
lenders and other high-volume UCC filers owing to a couple of key benefits. First,
E-filing is a great way to reduce UCC filing costs. That’s because most states charge a lower fee
to file a UCC that is submitted electronically than they do for a paper
document that is presented for “over the counter” processing. Consider
Delaware, for example, where a one-page, single debtor UCC Financing Statement
submitted in paper form will incur a $100 filing fee while that same document submitted
electronically will incur a charge of only $30.
E-filing UCC documents not only saves money it also saves
time. A paper filing is subject to indexing backlogs and other processing
delays at state filing offices, which can slow the turn-around time for
acknowledgement. A filing that is submitted electronically requires little (if
any) filing officer involvement though, so it is often assigned a date and file
number much more quickly. In fact, most E-filed UCCs are acknowledged within 24
hours – sometimes even sooner.
Despite these benefits, some UCC filers have been reluctant
to adopt E-filing over concerns about formatting changes that can occur with
electronically filed UCC documents. Here’s why.
If you elect to begin E-filing your UCCs, it is important to
be aware that the acknowledgement copy you receive back from the state may look
different from the document you prepared. In many states, an electronically
filed document will undergo minor changes during the submission process. These can
include converting text to ALL CAPS, changes to font style or size, adjustments
in spacing or formatting of collateral descriptions and more.
UCC experts agree that these changes are purely cosmetic and
will not compromise the effectiveness of the record, but it is always best to
know what to expect when making a change to an important business process.
Ready to Start
E-filing?
The CLAS Information Services UCC eZFILE® system offers E-filing in every
state that accepts UCCs electronically. That’s over 40 filing offices
nationwide! As an added benefit, every document submitted through UCC eZFILE®
is reviewed by one of our highly trained UCC experts to catch potential filing
errors, reduce rejected filing and save you money. Contact CLAS today at 800.952.5696 or connect@clasinfo.com to learn more or click here to request a free system demonstration!
